CMOs resort to ‘low risk, low return’ strategies
Nearly three-quarters (73%) of CMOs are falling back on “low risk, low return” strategies and relying on existing customers rather than new markets to fuel growth in 2021.
More than a third (39%) of CMOs plan to increase sales of existing products to existing customers, while 34% will introduce new products to existing customers in 2021.
But this behaviour is at odds with the desire among CMOs to “reinvent and rescale key strategies” in response to the challenges of 2020.
In the survey of 381 marketers from September to October exploring 11 key marketing strategies that could accelerate growth post-pandemic, half of the respondents said they intend to “rescale or reinvent” six of the 11 strategies. Nearly one-third (31.8%) plan to rescale or reinvent eight of the 11 strategies.
“Focusing on existing customers has a number of benefits for CMOs, namely being low cost and low risk. But low risk is matched by relatively low return,” says Gartner vice-president analyst, Jay Wilson.
“At the same time, we see CMOs being overly ambitious in terms of the change they expect to bring to how their organisations interact with customers. With the scale of recent change organisations have experienced as a result of Covid-19, CMOs must take care to ensure their own strategic approach is matched to the enterprise’s aspirations.”
Millennials most willing to trust marketing
Younger generations trust marketing more than older consumers, with 53% of millennials and 52% of Gen X saying they trust marketing on average, compared to 40% for Gen X and 29% for baby boomers.
Email is millennials’ most trusted channel, with 69% saying they trust email marketing messages, followed by 57% for post, 55% for face-to-face interactions and social media, 52% for video and 45% for phone.
Email is the most trusted marketing channel across all age groups, with Gen Z (59%), Gen X (58%) and baby boomers (50%) all placing it above all other channels. It is also consumers’ preferred channel for communication, with 73% of respondents across all age groups ranking it in their top two.
Jobs in digital marketing rise sharply
Digital marketing and social media roles grew by 52% in the UK last year, according to an analysis of LinkedIn’s 29 million UK members.
As marketing budgets tightened, there was a rise in demand for roles such as growth hacker, growth specialist, marketing consultant, social media manager and social media coordinator.
These types of roles attracted a younger demographic with an average age of 28, and 68% of those hired were female.
There was also a 143% increase in those hired for ecommerce-related roles during the pandemic and a 118% rise in digital content freelance roles.
“Digital skills are going to grow in importance this year as brands increasingly shift spending to digital channels to drive greater reach and business impact,” says LinkedIn head of marketing solutions, Tom Pepper.
Marketing budgets suffer amid Covid uncertainty
Relentless pressure from the coronavirus pandemic, combined with the end of the Brexit transition period, saw total UK marketing budgets decline markedly in the fourth quarter.
A net balance of -24% respondents noted a contraction in marketing budgets over the period. Just 16.4% of companies reported an increase in available funds, while 40.4% saw a decline.
Although marked, the reduction was considerably less severe than those seen in the second (-50.7%) and third (-41%) quarters of 2020. In fact, the budget cuts were at their softest level since before the escalation of the pandemic in spring last year.
Covid-19 and its impact were, however, cited as the main reasons for budget cuts. The IPA Bellwether survey found anecdotal evidence of widespread cost-cutting as businesses adapted to new market conditions and restrictions.
Budgets for event marketing experienced the harshest cuts, with a net balance of -62.9% of companies experiencing decreased funds in the fourth quarter. Events had already been hit by a balance of -64.1% during the previous quarter.
A quarter of respondents reported a fall in spend on market research, compared to -32.6% during the third quarter. Spend on main media advertising fell by a net balance of -21.8%, with declines also seen in spend on direct marketing (-13.9%) and public relations (-8.5%).
Source: IPA Bellwether
Amazon Prime sees highest number of sign-ups in Q4
Amazon Prime secured nearly half (49.1%) of new UK sign-ups to subscription video-on-demand (SVOD) services in the fourth quarter of 2020.
This means 53.5% of UK households are now Prime members, with nearly 2 million households joining Prime during 2020.
More Amazon Prime members used Prime Video during the period, with 62.6% watching programmes compared to 60.5% in the previous quarter.
Some 16.7 million British households had at least one SVOD subscription by the end of 2020.
BritBox had a solid Q4, rising above both Now TV and Apple TV for the first time in terms of share of new subscribers.
Netflix continued to dominate the battle for the most popular streamed content, with shows such as The Crown pulling in viewers. The brand saw a record year of growth, adding 8.5 million new members globally in Q4.